Storebrand Asa Unsp/Adr

Good morning, ladies and gentlemen, and welcome to Storbrand's third quarter result presentation. As usual, our CEO, Odd-Aril Grefstad, will present the key highlights of the quarter, followed by CFO, Kjetil Krøtche, who will dive deeper into the numbers. At the end of the presentation, participants in the team's webinar will have a chance to ask questions. Details on how to join the webinar are found on the Investor Relations website. But without further ado, I give the word to our CEO, Odd Aril Grefstad.

Thank you, Johannes, and good morning, everyone. I am excited to share another strong quarter with you marked by substantial growth and improved profitability. We gained trust among new and existing customers and are on track to deliver on our targets for 2025. Before I get into the numbers, I want to highlight one important change in our executive management team. Kjetil Krösche, as many of you are familiar with, has been appointed as Storbrann's CFO, succeeding Lars Løddesøl, who stepped down after nearly 25 years in executive management positions in Storbrann, including 14 years as CFO. Lars has been instrumental in shaping Storbrand's financial strength and strategic direction. And I want to thank him sincerely for his dedication and leadership. And I appreciate that Lars will remain an active contributor to the group also going forward. Now, let's start with the financial highlights. Storbrand delivered a record high group profit of 1,586 million in the third quarter, reflecting continued growth, solid cost control, and improved insurance results. The operational result was 1,091 million, up 16% year on year. It's worth noting that insurance premiums exceeded 10 billion, representing a 20% increase from last year. These results show the strength of the diversified business model and our ability to deliver value for both customers and shareholders. Our commitment to increasing dividends and long-term share buybacks continues. Since 2016, we have steadily raised our dividend per share, and our ambition next year is to continue a growth rate broadly consistent with previous years. The Board's long-term plan is to return 12 billion to shareholders through annual buybacks by 2030, while also growing the ordinary dividend. It remains 342 million in share buyback in the fourth quarter, completing the 1.5 billion program for 2025. As many of you are familiar with, Storbrann aims to take three commercial positions in the markets we operate in. A, to be the leading provider of occupational pensions in both Norway and Sweden. And B, to be the Nordic powerhouse in asset management. and C to be the fast-growing challenger in the Norwegian retail market for financial services. These positions are strengthened by our strategic enablers, people, sustainability and digital frontrunner, together unlocking additional growth. Let's look at the growth delivered in the quarter. I am pleased to report that the double-digit growth continues across the Group. Our strong growth underlines Storbrand's robust and consistent performance. Storbrann are positions in attractive and structural growing savings markets, as well as rapidly increasing our market shares within insurance and retail banking. Moving to occupational pension. Storbrann and Kroon has now more than 20% of the assets under management in the fast-growing market for individualized pension, reflecting our strong offering and competitive position. This is the part of the pension system where individuals freely can choose their own provider as a part of the corporate-sponsored schemes. In the guaranteed segments, activity among closed pension funds has increased, and several public occupational pension tenders are ongoing. A highlight this quarter is the commercialization of our innovative and preventive concept, VELL, designed to help employees stay healthy, recover faster, and reduce long-term sick leave. The concept now progresses from a pilot to full-scale implementation. Well will be an integrated part of our disability insurance products. Rising disability levels are a pressing challenge for the Norwegian society. We believe that Well will make a positive contribution both to helping people back to work and reducing costs for our corporate clients. We also expect reduced insurance claims. The government has proposed tax exemptions for mutual funds. This is good news for our customers. Consequently, Storbrand can maintain Storbrand Domicil for its mutual funds instead of reallocating them. The government's proposals show a willingness to listen to industry feedback and to create a more competitive environment for Norwegian fund management. Operationally this quarter, storbrand asset management reached 1,561 billion in asset management. Net inflows were 16 billion, mainly from external clients. Active funds generated 90 million in performance-based income this quarter, and 239 million year-to-date. Speaking of performance, I am proud to share that our flagship Norwegian equity fund, Storbrann Norge, has delivered a stunning 10 000 percent net return to customers since its launch in 1983. This is a milestone in the Norwegian fund history, with no other domestic equity fund reaching this level of total return. The fund has outperformed its reference index by around 4,300 percentage points net of fees. The performance illustrates the power of successful active management when done right, and the power of compound interest. If you had 100,000 in Storbrann Norge fund in 1983, Your investment would be worth 10 billion today. Finally, let's look at our strong progress in the Norwegian retail market. We have reached a 7.6% market share in retail P&C, up from 7.4% last quarter. Retail insurance portfolio premium grew by 26% year on year, and our bank lending portfolio increased by 12% to 95 billion. Our digital-first multi-channel approach is reasoning well with customers, and we continue to see strong growth in both insurance and banking. Kron is a key enabler for storbrands retail growth. An important part of our strategy to deliver scalable, customer centric solutions for savings and also now for pensions. Storbrand Krone assets under management have shown impressive growth, reaching approximately 29 billion by the third quarter. This represents a compound annual growth rate of 70 percent since Storbrand's acquisition of Kron. The platform's growth is driven by both pension and savings products with about 45 percent of assets now in pensions solutions and 55 percent in savings products. Kron's digital-first approach and user-friendly interface have made it an attractive choice for customers seeking simple, transparent, and cost-effective ways to manage their long-term savings and pensions. And with that, I leave the word back to you, Johannes.

Thank you, Odaril. Now, let's take a closer look at the numbers. Kjetil, please go ahead.

Thank you, Johannes, and let's dive a little deeper into the numbers. The quarterly result before amortization was 1,586,000,000. This represents an increase of 5% compared to the strong third quarter last year, and an 11% increase compared to the second quarter this year. The result development confirms the positive momentum in the business. In particular, the operating result is strong with a record 1 billion and 91 million, benefiting from improving insurance results and growth in the business. As for special items in the top left corner, We have chosen to highlight 70 million of the finance result as a positive special item, as this stems from a re-evaluation of future earn-out liabilities related to the acquired Danish infrastructure asset manager AIP. Earnings per share ended at 3.08. This is slightly reduced from the third quarter last year, which was influenced by a lower tax rate than normal due to currency hedging and hedging effects in general. The annualized return on equity for the quarter ended at 19%, confirming Storebrands trajectory towards a capital light business model. It's also fair to note that this is higher than our medium term expectations, as there is some seasonality and special items in the results. Let me move to the solvency ratio for the quarter. The solvency margin ended at 195%, down from 200% last quarter. Post-tax results contributed positively. This was offset by the 750 million buyback program and accrued dividends in the quarter. The remainder of the reduction in the quarter was driven by growth in the business and changes in regulatory assumptions. With the current level of solvency, buffers and interest rates, the balance sheet is very robust to fluctuations in the financial markets. Let's go a little deeper into the results line by line at the group level and then through the lens of the reporting segments. So the growth in the business continues. The top line growth for the third quarter was 8%. The insurance result is up 44% compared to the third quarter last year. Growth, price increases and other measures are giving the expected effects. Storebrand has a double digit growth ambition for 2025 and a corresponding cost guidance of 6.9 billion for the full year. Performance related costs and currency effects was not included in the guided amount. Record strong insurance sales have led to additional distribution costs year to date. Altogether, these items add additional 100 million in costs compared to the guided amount so far this year. The underlying cost development since the beginning of the year is broadly in line with the plan. Changes to the Norwegian VAT Act as announced in the national budget is expected to have a negative cost impact for Storbrann, amounting to approximately 100 million annually starting from the second half of 2026. We are working with measures to mitigate the effect of the VAT change. Financial results are strong following an increased profit sharing in the Norwegian guaranteed portfolios. Good profit sharing in the Swedish portfolios and a stable return on company capital has also contributed in the quarter. Amortization and write-down of intangible assets from acquired business amounted to 128 million in the quarter. The increase compared with the third quarter in 2024 is mainly due to a 50 million write-down of intangible assets related to the capital investment acquisition. The tax charge for the quarter was 18%. Currency movements and asymmetry in how tax is calculated on assets and currency hedges will affect tax costs from quarter to quarter. Our tax guidance is still 19 to 22%. This table shows the number as on the previous page, but split into the business lines, savings, insurance and guaranteed. Savings and insurance reports positive development in the quarter and year to date, whilst guaranteed is slightly reduced. I will comment on each area in the following slides. The unit-linked business shows continued growth in premiums and reserves. Reserves has grown with 11% compared with the same period last year. The margins are down by approximately three basis points in the same period. The asset management business reports record high AUM at the end of the quarter and strong performance results. The top-line margins are at 20 basis points, in line with expected levels. The infrastructure asset manager, AIP, is still in a build-up and commercialization phase. Longer lead times in attracting new capital in the current financial environment have caused delays in the current fundraising. This has led to a negative result of around 10 million in the quarter and 60 million year to date. We expect a neutral result for AIP in the fourth quarter and a positive contribution for 2026. Lastly, the bank grows lending by 12% with satisfactory margins in the quarter. When we go to Kron, we see that the assets under management is now close to 30 billion and has more than tripled since the acquisition of the platform. The insurance business is delivering strong results after a challenging couple of years. In particular, the retail P&C business is developing strongly. We continue to grow the number of customers despite price increases and our market share, which is recorded with a quarterly delay, has increased from 7.4 to 7.6%. Growth comes at a cost, and strong sales have led to increased sales provisions. We book all sales costs upfront and do not book any deferred acquisition cost in the insurance segment. The increased sales cost weakens the combined ratio by approximately two percentage points compared to the same period last year. With 89% combined ratio, it's fair to mention that it was a quarter with lower large losses than normal. We maintain the ambition to deliver 92% or less in combined ratio, but continued strong sales and associated sales costs and weather-related claims could lead to somewhat higher combined ratio for 2025. Looking into the fourth quarter, we expect a negative impact of less than 50 million from the storm Amy that hit Norway after the close of the quarter. In guaranteed, the results are satisfactory. Worth to notice is profit sharing improvement in the Belgian financial markets, especially in Norwegian paid policies. Customer buffers are increased in the quarter and is now at 8% in Norway and almost 27% in Sweden. Moving to the financial results on company capital in the other segment. The main result driver in this segment is the return on company capital in the Holco and the life insurance companies, less the cost of debt. The company capital was at 28.4 billion as of the third quarter and the financial result in the segment amounted to 155 million in the quarter. Let's end with a status update on our non-financial and financial targets. Store Run is here for the long term, and we want to help our customers create a brighter future for the long term. It means that Store Run is still committed to science-based target setting and the green transition. I'm happy to report that we are ahead of our sustainability targets this quarter. Also worth noting this quarter is that we were ranked among the top 5% in the insurance industry in the S&P Global Corporate Sustainability Assessment. Furthermore, the broker Sødeberg & Partners recognized Storbrand as the most sustainable Norwegian life insurer. As for the financial ambitions, with the results we present today, we have good momentum in the group and we are well on our way to delivering on our 2025 ambitions on results and return on equity. Lastly, we want to remind you and extend an invite to our CMD in Oslo on the 10th of December. The event will be hybrid and may be followed online, but we hope to see as many as possible in Oslo to meet us in person. I would also again invite all stakeholders to contact us with any suggestions you may have for which topics you want us to cover at the CMD. And with that, I hand the word back to you, Johannes.

Thank you, Kjetil. We're now happy to take questions from our audience. Please use the raise hand function in the Teams webinar to be placed in line to ask a question. To give everyone an opportunity to ask questions, we kindly ask you to limit yourself to two questions at a time. While we are waiting for the first question, Odariel, you added a little test on the return in the flagship fund, Storbrann Norge. Is that correct?

Very well spotted, Johannes. It's a tremendous story about Storbrann Norge, but of course, 100,000 with this development since 1983 would have been 10 million today, not 10 billion, but well spotted.

Good to have that clarified with the returns of this fund. We might actually come there someday. Now over to the first question, which comes from Hans Rettedal Kristiansen in Danske Bank. Please go ahead, Hans.

Yes. Good morning. Thank you for the presentation. So, my first question is on the savings segment and just trying to kind of understand the broader picture here. Looking at the cash equivalent earnings in the quarter, it's 815 million, but that includes sort of AIP extraordinary effect. So, if you adjust for that, it looks like it's sort of just below Q3 in 2024. So I'm just trying to understand the dynamics there, given the fact that your AUM growth is up 16% year over year, and what the moving parts are and how you kind of plan to show increasing profitability in that segment. And then my second question is, you've previously mentioned around the liquidity in the holding company, and it looks like it's at 3.9 billion this quarter. where you've said you aim to be at around 3.5 to 4 billion going forward. So in Q4-24, you gave us an expectation of remittance of 4.2 billion in 2025. Can you just say something about how that 4.2 billion in total remittances is developing according to your expectations back then and with the delivery so far in 2025? Thank you.

Thank you, Hans. Let's start with the savings segment and the earnings development. As you are correctly pointing out, there's been a flattish if you exclude the bank over the last year. Looking on the medium term, we see that the growth has come through also in the result in this segment. And then, as you mentioned, this year there has been a negative drag from AIP of around 60 million. we have done some investments in growth and it's worth to mention that the segment now in unit linked is is having costs associated with distribution in the bank of of unit link products and that means that the success we have seen in own pension account now taking 20 percent of the market share of the flow also on the retail space adds some cost in the unit linked line but this is an internal cost allocation not a new cost and then it's our view is that over time you will see the structural growth on the top line and the AUM also come down and continue to scale down on the bottom line even with some further margin pressure the hold cold liquidity i think the short answer there is that you should all else equal expect somewhat more from the bank and in the insurance business than you saw last year so those will be the main changes i think in the in the liquidity upstreaming uh you know from the four to four point two billion you saw last year to what you can expect this year and also we

Aim to take out somewhat more than the annual result from the life insurance company also this year And if I could just have a follow-up Could you maybe on timing of the life insurance company sort of what do you expect there? over over the perhaps medium term when when do you expect to see more remittances and

On the life insurance company, that is overcapitalized with a solvency ratio well above 100%. Then over time, we will take out capital from that company as a part of the capital management in the group. But you shouldn't expect any sudden lumps in capital coming from the life company. It should be predictable and in good dialogue with all stakeholders.

I think you saw us taking 1 billion last year, 500 million the year before, and that's the ballpark number I think you should expect us to also be able to take out going forward.

thank you very much that was all from my side and congratulations on the appointment chat thank you thank you for the questions Hans we have a next question from Ulrik Sears here in Nordea please go ahead apologies it's sorry I thought there was one guy ahead of me in the line so I was a bit

Thank you.

Two questions. I was just wondering if you could help me here to date. If we take the solvency generation, subtract the dividend accrual and the buybacks and the cost of the net growth from P&C Insurance Bank but also runoff from guarantees. Like how much solvency are you generating above when we net out the growth and the accruals?

It's actually a tricky question to take on the back foot here, Ulrik. I'll work a little bit through the numbers and get back to that. I think the guidance of roughly 18% before any dividends buybacks, that is roughly where we are at at the moment. And then I need to go a little bit back in time to look at kind of what is special, what is allocation changes in the guaranteed portfolios and other things that kind of impact the from moment to moment analysis. But on the run rate basis, the around the around guided level from the last CMD shouldn't be too far off.

Yeah, that's very helpful. But then I was also following up on a bit on what Hans is saying. You're basically saying that you will upstream or remittance will be roughly the same from live, but you are generating a lot of capital and you have a lot of excess capital. Is there anything on the sort of runoff buyback potential assumptions that has changed?

I can start and I think what is most important here is that we've always said that if we end up with more liquidity, more solvency and more result generation, of course, then you will continuously make new assessments. But you can't sell the skin before you have shot the bear. So that I think is an important place to start.

But just to be clear also, last year, we gave the whole result in the life insurance company, upstreamed it to Holco. And on top of that, we took 1 billion. up to the holding company. And of course, over time, such an upstreaming above this year's results, that you also need to have and apply to the regulator to do more than 100% upstreaming. But we have done that for a couple of years. And as I said, expect to do that also going forward.

Yeah, Greg. Yeah, thank you. That's helpful. And then I was just wondering one last thing. You have, I think, record high spread between your guarantees and the expected return, page 13, 190. I was just wondering, what is the amount of assets that's in position for profit sharing in the paid up segment right now?

yeah i think i think we can also point back to the capital market stay guidance from 2023 there will rick where roughly one third of the portfolio were in profit sharing last year in norway meaning 50 billion and then we're around 100 billion nokis this year meaning two-thirds of the paid policies portfolio and and some individual contracts then we will give you an update on on that area when we have the capital market stay on on december 10th i think

but in general i get the feeling this is very stable business yeah i think what we are we are very pleased to see the development in uh in the guaranteed segment uh where we have been now massively building buffers also in this quarter it's of course much used also the opportunity to take out the mismatch interest rate mismatch very much in the portfolio and that of course gives opportunities for more stable and also somewhat growing profit sharings going forward and you know the guiding this year is for around 600 million in profit sharing somewhat lower in Sweden this year compared to what we said but there seems to be somewhat higher in Norway and on top we should with normal of course markets be able to be a bit above the guided 600 million.

Sorry for a bit difficult questions today but how dependent are you on the equity in the life company to keep that asset liability hedge

So the asset liability hedge is only coming from interest rate papers, whilst the equity allocation is there to provide risk premiums so that we can have surplus return in the portfolios that have high buffers.

Yeah. Okay. Got it. Thank you. Thank you, Ulrik. Then we have a next question from David Barma in Bank of America. Please go on, David.

Good morning. Thanks for taking my question. Firstly, on insurance, could you please give us a sense of where you see the underlying performance in the quarter and maybe how you expect margins to develop? You still have a lot of pricing to earn through and you've made a big point about the cost being upfronted and that becoming a tailwind. So is there any reason you wouldn't be able to to get below 90% in the next quarters? That's my first question. And then secondly, on the solvency partial internal model, can you just update us on the timeline for this, please, and whether we should expect it by year-end still? Thank you.

On the insurance part, I guess it's worth noting on this quarter's 89, we had a quarter with lower large losses than normal. And then when we look into the fourth quarter, we still think it's possible to reach the 90 to 92, but they've also said that With the 50 million coming from the storm Amy and continued high sales, it might be a little bit above. We will see where we end up when we do the fourth quarter accounts. Then going forward, we still see a good trajectory within the P&C business. both on the corporate side and on the retail side. As we have said earlier, we have had somewhat weaker result on the disability line on workers comp and the more long tail lines. So they are still delivering higher combined ratios than the more pure PNC. And then looking at the longer term picture, what's happening in store brand is that we are moving from a predominantly long-tailed insurance business to a more short-tailed insurance business with more P&C in it.

And I think it's fair to say that it's quite a strong seasonality in the Nordics when it comes to insurance. It goes without saying with the winter, with the car insurance and so on. So typically you see higher combined ratios in the fourth quarter and the first quarter. But it also goes with the more personal lines in corporate pension where you see more disability reported in the winter time compared to holiday seasons and summer. So seasonality is a part of this. and then again uh fourth quarter will be fourth quarter we have amy and and these kind of things but uh long term of course we see this ability uh some pockets still uh uh coming out with the negative result but we have pricing effects uh coming into first of january in this uh smaller portfolios that we believe will take care of the profitability in these products and also as i talked about our well concept really shows promising results and i think might be a differentiator for us all and also reduce our costs in this disability products going forward

As for the partial internal model, as you're familiar with, we've sent it to the regulator and we're now in the period where we are discussing elements of the model with the regulator. I think in general, it's very hard to guide on the timelines when you're working together with the regulator. And it's also worth noting that this is the first partial internal model for a Norwegian life insurance company. So this is new also for the regulator. So those discussions will continue and it's hard to guide on an exact timeline. The most important part though is that we use this model as a risk management tool and a capital allocation tool day to day in store brand and it helps us make better decision on capital allocation.

Thank you. Can I just ask you on the disability point, are you able to give us an estimate of the combined ratio for disability with an insurance in the first nine months of the year?

I think we're close to 100, but a little below. I'm looking at you, Johannes.

Yeah, I think that's true, Kjetil. The corporate insurance segment we report externally very much represent our disability products. The disability-linked insurance product is the largest by far product in that segment, and it has delivered results year to date, more or less in line with our plans. Thank you. Thank you. We have a next question here from Thomas Svensson in SEB. Please go ahead, Thomas.

Yes. Good morning. I have two questions. First, on the mortgage bank, you post strong growth QOQ this quarter as well. So with increased competition from S-Banken, maybe other players, do you see any change in How much do you feel the increased competition in this mortgage lending space? And second question on non-life insurance. What is the message from the sales force these days? Are there any changes in sort of the competitive pressure on selling these non-life insurance policies or is it unchanged?

Thank you. I can start with the bank. I must say the development in the bank is very strong. We have a very dedicated sales force in the bank in combination with the digital platform Kroon, as we talked about. We are not seeing that the growth in the bank is tailing off. We have a good inflow of clients and I think one of the elements here is to have good solutions digital solutions you have are close to your customers you are swift in giving the right well certificates and so on if someone is hunting for for a new home so it's a lot lot of elements that is important to to attract new customers and we feel that we are in a very good competitive positions to still have good growth in in the bank going forward

Then I'll just continue on the insurance part. What we have seen so far is a little bit higher churn in the second half of the year, but not any large changes really. You see that we're still increasing the market shares with 0.2 percentage points now in the quarter. I think we are, of course, trying to have a disciplined approach to pricing in this segment, as this is a segment where we need to, from time to time, have AMIs and other things. So I think a disciplined market and, you know, there's competition, but there is not a huge increase in churn.

Okay, thank you for that.

Thank you, Thomas. It looks like we've covered all the questions, so that wraps up today's presentation. We look forward to seeing you again on the Capital Markets Day on December 10th here at LeaseHacker. Thank you for attending and goodbye. Thank you. so so you Good morning, ladies and gentlemen, and welcome to Storbrand's third quarter result presentation. As usual, our CEO, Odd-Aril Grefstad, will present the key highlights of the quarter, followed by CFO Kjetil Krøtche, who will dive deeper into the numbers. At the end of the presentation, participants in the team's webinar will have a chance to ask questions. Details on how to join the webinar are found on the Investor Relations website. But without further ado, I give the word to our CEO, Odd Aril Grefstad.

Thank you, Johannes, and good morning, everyone. I am excited to share another strong quarter with you marked by substantial growth and improved profitability. We gained trust among new and existing customers and are on track to deliver on our targets for 2025. Before I get into the numbers, I want to highlight one important change in our executive management team. Kjetil Krösche, as many of you are familiar with, has been appointed as Storbrann's CFO, succeeding Lars Løddesøl, who stepped down after nearly 25 years in executive management positions in Storbrann, including 14 years as CFO. Lars has been instrumental in shaping Storbrand's financial strength and strategic direction. And I want to thank him sincerely for his dedication and leadership. And I appreciate that Lars will remain an active contributor to the group also going forward. Now let's start with the financial highlights. Storbrand delivered a record high group profit of 1,586 million in the third quarter, reflecting continued growth, solid cost control, and improved insurance results. The operational result was 1,091 million, up 16% year on year. It's worth noting that insurance premiums exceeded 10 billion, representing a 20% increase from last year. These results show the strength of the diversified business model and our ability to deliver value for both customers and shareholders. Our commitment to increasing dividends and long-term share buybacks continues. Since 2016, we have steadily raised our dividend per share, and our ambition next year is to continue a growth rate broadly consistent with previous years. The Board's long-term plan is to return 12 billion to shareholders through annual buybacks by 2030, while also growing the ordinary dividend. It remains 342 million in share buyback in the fourth quarter, completing the 1.5 billion program for 2025. As many of you are familiar with, Storbrann aims to take three commercial positions in the markets we operate in. A, to be the leading provider of occupational pensions in both Norway and Sweden. And B, to be the Nordic powerhouse in asset management. and C to be the fast-growing challenger in the Norwegian retail market for financial services. These positions are strengthened by our strategic enablers, people, sustainability and digital frontrunner, together unlocking additional growth. Let's look at the growth delivered in the quarter. I am pleased to report that the double-digit growth continues across the group. Our strong growth underline Storbrand's robust and consistent performance. Storbrand are positioned in attractive and structural growing savings markets, as well as rapidly increasing our market shares within insurance and retail banking. Moving to occupational pension. Storbrann and Kron has now more than 20% of the assets under management in the fast-growing market for individualized pension, reflecting our strong offering and competitive position. This is the part of the pension system where individuals freely can choose their own provider as a part of the corporate sponsored schemes. In the guaranteed segments, activity among closed pension funds has increased, and several public occupational pension tenders are ongoing. A highlight this quarter is the commercialization of our innovative and preventive concept, VELL, designed to help employees stay healthy, recover faster, and reduce long-term sick leave. The concept now progresses from a pilot to full-scale implementation. Well will be an integrated part of our disability insurance products. Rising disability levels are a pressing challenge for the Norwegian society. We believe that Well will make a positive contribution both to helping people back to work and reducing costs for our corporate clients. We also expect reduced insurance claims. The government has proposed tax exemptions for mutual funds. This is good news for our customers. Consequently, Storbrand can maintain Storbrand domicil for its mutual funds instead of reallocating them. The government's proposals show a willingness to listen to industry feedback and to create a more competitive environment for Norwegian fund management. Operationally this quarter, storbrand asset management reached 1,561 billion in asset management. Net inflows were 16 billion, mainly from external clients. Active funds generated 90 million in performance-based income this quarter, and 239 million year to date. Speaking of performance, I am proud to share that our flagship Norwegian equity fund, Storbrann Norge, has delivered a stunning 10,000% net return to customers since its launch in 1983. This is a milestone in the Norwegian fund history, with no other domestic equity fund reaching this level of total return. The fund has outperformed its reference index by around 4,300 percentage points net of fees. The performance illustrates the power of successful active management when done right, and the power of compound interest. If you had 100,000 in Storbrann Norge fund in 1983, Your investment would be worth 10 billion today. Finally, let's look at our strong progress in the Norwegian retail market. We have reached a 7.6% market share in retail P&C, up from 7.4% last quarter. Retail insurance portfolio premium grew by 26% year on year, and our bank lending portfolio increased by 12% to 95 billion. Our digital-first multi-channel approach is reasoning well with customers, and we continue to see strong growth in both insurance and banking. Kron is a key enabler for storbrands retail growth. An important part of our strategy to deliver scalable, customer centric solutions for savings and also now for pensions. Storbrand Krone assets under management have shown impressive growth, reaching approximately 29 billion by the third quarter. This represents a compound annual growth rate of 70% since Storbrand's acquisition of Krone. The platform's growth is driven by both pension and savings products, with about 45% of assets now in pension solutions and 55% in savings products. Kroon's digital-first approach and user-friendly interface have made it an attractive choice for customers seeking simple, transparent and cost-effective ways to manage their long-term savings and pensions. And with that, I leave the word back to you, Johannes.

Thank you, Odaril. Now, let's take a closer look at the numbers. Kjetil, please go ahead.

Thank you, Johannes, and let's dive a little deeper into the numbers. The quarterly result before amortization was 1,586,000,000. This represents an increase of 5% compared to the strong third quarter last year, and an 11% increase compared to the second quarter this year. The result development confirms the positive momentum in the business. In particular, the operating result is strong with a record 1 billion and 91 million, benefiting from improving insurance results and growth in the business. As for special items in the top left corner, We have chosen to highlight 70 million of the finance result as a positive special item, as this stems from a re-evaluation of future earn-out liabilities related to the acquired Danish infrastructure asset manager AIP. Earnings per share ended at 3.08. This is slightly reduced from the third quarter last year, which was influenced by a lower tax rate than normal due to currency hedging and hedging effects in general. The annualized return on equity for the quarter ended at 19%, confirming Storebrands trajectory towards a capital light business model. It's also fair to note that this is higher than our medium term expectations, as there is some seasonality and special items in the results. Let me move to the solvency ratio for the quarter. The solvency margin ended at 195%, down from 200% last quarter. Post-tax results contributed positively. This was offset by the 750 million buyback program and accrued dividends in the quarter. The remainder of the reduction in the quarter was driven by growth in the business and changes in regulatory assumptions. With the current level of solvency, buffers and interest rates, the balance sheet is very robust to fluctuations in the financial markets. Let's go a little deeper into the results line by line at the group level and then through the lens of the reporting segments. So the growth in the business continues. The top line growth for the third quarter was 8%. The insurance result is up 44% compared to the third quarter last year. Growth, price increases and other measures are giving the expected effects. Storebrand has a double-digit growth ambition for 2025, and a corresponding cost guidance of 6.9 billion for the full year. Performance-related costs and currency effects was not included in the guided amount. Record-strong insurance sales have led to additional distribution costs year-to-date. Altogether, these items add additional 100 million in costs compared to the guided amount so far this year. The underlying cost development since the beginning of the year is broadly in line with the plan. Changes to the Norwegian VAT Act as announced in the national budget is expected to have a negative cost impact for Storbrann, amounting to approximately 100 million annually starting from the second half of 2026. We are working with measures to mitigate the effect of the VAT change. Financial results are strong following an increased profit sharing in the Norwegian guaranteed portfolios. Good profit sharing in the Swedish portfolios and a stable return on company capital has also contributed in the quarter. Amortization and write-down of intangible assets from acquired business amounted to 128 million in the quarter. The increase compared with the third quarter in 2024 is mainly due to a 50 million write-down of intangible assets related to the capital investment acquisition. The tax charge for the quarter was 18%. Currency movements and asymmetry in how tax is calculated on assets and currency hedges will affect tax costs from quarter to quarter. Our tax guidance is still 19 to 22%. This table shows the number as on the previous page, but split into the business lines, savings, insurance, and guaranteed. Savings and insurance reports positive development in the quarter and year-to-date, whilst guaranteed is slightly reduced. I will comment on each area in the following slides. The unit-linked business shows continued growth in premiums and reserves. Reserves has grown with 11% compared with the same period last year. The margins are down by approximately three basis points in the same period. The asset management business reports record high AUM at the end of the quarter and strong performance results. The top line margins are at 20 basis points in line with expected levels. The infrastructure asset manager AIP is still in a build up and commercialization phase. Longer lead times in attracting new capital in the current financial environment have caused delays in the current fundraising. This has led to a negative result of around 10 million in the quarter and 60 million year to date. We expect a neutral result for AIP in the fourth quarter and a positive contribution for 2026. Lastly, the bank grows lending by 12% with satisfactory margins in the quarter. When we go to Kron, we see that the assets under management is now close to 30 billion and has more than tripled since the acquisition of the platform. The insurance business is delivering strong results after a challenging couple of years. In particular, the retail P&C business is developing strongly. We continue to grow the number of customers despite price increases, and our market share, which is recorded with a quarterly delay, has increased from 7.4 to 7.6%. Growth comes at a cost, and strong sales have led to increased sales provisions. We book all sales costs upfront and do not book any deferred acquisition costs in the insurance segment. The increased sales cost weakens the combined ratio by approximately two percentage points compared to the same period last year. With 89% combined ratio, it's fair to mention that it was a quarter with lower large losses than normal. We maintain the ambition to deliver 92% or less in combined ratio, but continued strong sales and associated sales costs and weather-related claims could lead to somewhat higher combined ratio for 2025. Looking into the fourth quarter, we expect a negative impact of less than 50 million from the storm Amy that hit Norway after the close of the quarter. In guaranteed, the results are satisfactory. Worth to notice is profit sharing improvement in the Belgian financial markets, especially in Norwegian paid policies. Customer buffers are increased in the quarter and is now at 8% in Norway and almost 27% in Sweden. Moving to the financial results on company capital in the other segment. The main result driver in this segment is the return on company capital in the Holco and the life insurance companies, less the cost of debt. The company capital was at 28.4 billion as of the third quarter, and the financial result in the segment amounted to 155 million in the quarter. Let's end with a status update on our non-financial and financial targets. Store Run is here for the long term, and we want to help our customers create a brighter future for the long term. It means that Store Run is still committed to science-based target setting and the green transition. I'm happy to report that we are ahead of our sustainability targets this quarter. Also worth noting this quarter is that we were ranked among the top 5% in the insurance industry in the S&P Global Corporate Sustainability Assessment. Furthermore, the broker Sødeberg & Partners recognized Storebrand as the most sustainable Norwegian life insurer. As for the financial ambitions, with the results we present today, we have good momentum in the group and we are well on our way to delivering on our 2025 ambitions on results and return on equity. Lastly, we want to remind you and extend an invite to our CMD in Oslo on the 10th of December. The event will be hybrid and may be followed online, but we hope to see as many as possible in Oslo to meet us in person. I would also again invite all stakeholders to contact us with any suggestions you may have for which topics you want us to cover at the CMD. And with that, I hand the word back to you, Johannes.

Thank you, Kjetil. We're now happy to take questions from our audience. Please use the raise hand function in the Teams webinar to be placed in line to ask a question. To give everyone an opportunity to ask questions, we kindly ask you to limit yourself to two questions at a time. While we are waiting for the first question, Odariel, you added a little test on the return in the flagship fund, Storbrann Norge. Is that correct?

Very well spotted, Johannes. It's a tremendous story about Storbrann Norge, but of course, 100,000 with this development since 1983 would have been 10 million today, not 10 billion, but well spotted.

Good to have that clarified with the returns of this fund. We might actually come there someday. Now over to the first question, which comes from Hans Rettedal Kristiansen in Danske Bank. Please go ahead, Hans.

Yes, good morning. Thank you for the presentation. So my first question is on the savings segment and just trying to kind of understand the broader picture here. Looking at the cash equivalent earnings in the quarter, it's 815 million, but that includes sort of AIP extraordinary effect. So if you adjust for that, it looks like it's sort of just below Q3 in 2024. uh so so i'm just trying to understand the dynamics there given the fact that your aum growth is up 16 year over year um and and what the moving parts are and how you kind of plan to to show increasing profitability in that segment um and then my second question is you've previously mentioned around the liquidity in the holding company and it looks like it's at 3.9 billion this quarter where you've said you aim to be at around 3.5 to 4 billion going forwards. So in Q4 24, you gave us an expectation of remittance of 4.2 billion in 2025. Can you just say something about how that 4.2 billion in total remittances is developing according to your expectations back then and with the delivery so far in 2025? Thank you.

Thank you, Hans. Let's start with the savings segment and the earnings development. As you are correctly pointing out, there's been a flattish if you exclude the bank over the last year. Looking on the medium term, we see that the growth has come through also in the result in this segment. And then, as you mentioned, this year there has been a negative drag from AIP around 60 million. We have done some investments in growth, and it's worth mentioning that the segment now in UnitLinked is having costs associated with distribution in the bank of UnitLinked products. That means that the success we have seen in our own pension account, now taking 20% of the market share of the flow also in the retail space, adds some cost. in the unit linked line but this is an internal cost allocation not a new cost and then it's our view is that over time you will see the structural growth on the top line and the AUM also come down and continue to scale down on the bottom line even with some further margin pressure On the holdco liquidity, I think the short answer there is that you should all as equal expect somewhat more from the bank and in the insurance business than you saw last year. So those will be the main changes I think in the liquidity upstreaming from the 4.2 billion you saw last year to what you can expect this year and also we

aim to take out somewhat more than the annual result from the life insurance company also this year and if i could just have a follow-up could you maybe on timing of the life insurance company sort of what do you expect there over over the perhaps medium term when when do you expect to see more remittances Going forward?

Yeah, so on the life insurance company, that is over capitalized with a solvency ratio well above 100%. And then over time, we will take out capital from that company as a part of the capital management in the group. But you shouldn't expect any kind of sudden lumps in capital coming from the life company. It should be predictable and it should be in good dialogue with all stakeholders.

I think you saw us taking 1 billion last year, 500 million the year before, and that's the ballpark number I think you should expect us to also be able to take out going forward.

Thank you very much. That was all from my side, and congratulations on the appointment, Kjetil. Thank you.

Thank you for the questions, Hans. We have a next question from Ulrik Sirsir in Nordea. Please go ahead.

Apologies. Sorry, I thought there was one guy ahead of me in the line, so I was a bit... Okay.

After you. Thank you.

Two questions. I was just wondering if you could help me here to date. If we take the solvency generation, subtract the dividend accrual and the buybacks and the cost of the net growth from P&C Insurance Bank, but also run off from guarantees, like how much solvency are you generating above when we net out the growth and the accruals?

Yeah, it's actually a tricky question to take on the back foot here, Ulrik. So I'll work a little bit through the numbers and get back to that. I think the guidance of roughly 18% before any dividends buybacks, that is roughly where we are at at the moment. And then I need to go a little bit back in time to look at kind of what is special, what is allocation changes in the guaranteed portfolios and other things that kind of impact the from moment to moment analysis. But on the run rate basis, the around the around guided level from the last CMD shouldn't be too far off.

Yeah, that's very helpful. But then I was also following up on a bit on what Hans is saying. You're basically saying that you will upstream or remittance will be roughly the same from live, but you are generating a lot of capital and you have a lot of excess capital. Is there anything on the sort of runoff buyback potential assumptions that has changed?

I can start and I think what is most important here is that we've always said that if we end up with more liquidity, more solvency and more result generation, of course, then you will continuously make new assessments. But you can't sell the skin before you have shot the bear. So that I think is an important place to start.

But just to be clear also, last year we gave the whole result in the life insurance company, upstreamed it to Holco. And on top of that, we took 1 billion. up to the holding company. And of course, over time, such an upstreaming above this year's results, that you also need to have an apply to the regulator to do more than 100% upstreaming. But we have done that for a couple of years. And as I said, expect to do that also going forward.

Yeah, I agree. Yeah, thank you. That's helpful. And then I was just wondering one last thing. You have, I think, record high spread between your guarantees and the expected return, page 13, 190. I was just wondering, what is the amount of assets that's in position for profit sharing in the paid up segment right now?

Yeah, I think I think we can also point back to the Capital Markets Day guidance from 2023. Daryl Rick, where roughly one third of the portfolio were in profit sharing last year in Norway, meaning 50 billion. And then we're around 100 billion NOKs this year, meaning two thirds of the paid policies portfolio and and some individual contracts. Then we will give you an update on on that area when we have the Capital Markets Day on on December 10th, I think.

But in general, I get the feeling this is very stable business.

Yeah, I think we are very pleased to see the development in the guaranteed segment where we have been now massively building buffers also in this quarter. It's of course much used also the opportunity to take out the mismatch, interest rate mismatch very much in the portfolio. And that of course gives opportunities for more stable and also somewhat growing profit sharings going forward. And the guiding this year is for around 600 million in profit sharing. somewhat lower in Sweden this year compared to what we said but there seems to be somewhat higher in Norway and on top we should with normal of course markets be able to be a bit above the guided 600 million.

Sorry for a bit difficult questions today but how dependent are you on the equity in the life company to keep that asset liability hedge

so the asset liability hedge is only coming from interest rate papers whilst the equity allocation is there to provide risk premiums so that we can have surplus return in the portfolios that have high buffers yeah okay got it thank you thank you ulrich then we have a next question from david barma in bank of america please go on david

Good morning. Thanks for taking my question. Firstly, on insurance, could you please give us a sense of where you see the underlying performance in the quarter and maybe how you expect margins to develop? You still have a lot of pricing to earn through and you've made a big point about the cost being upfronted and that becoming a tailwind. So is there any reason you wouldn't be able to to get below 90% in the next quarters? That's my first question. And then secondly, on the dissolvency partial internal model, can you just update us on the timeline for this, please, and whether we should expect it by year-end still? Thank you.

On the insurance part, I guess it's worth noting on this quarter's 89, we had a quarter with lower large losses than normal. And then when we look into the fourth quarter, we still think it's possible to reach the 90 to 92, but we've also said that with the 50 million coming from the Storm Amy and continued high sales, it might be a little bit above. We will see where we end up when we do the fourth quarter accounts. And then going forward, we still see a good trajectory within the P&C business. both on the corporate side and on the retail side. As we have said earlier, we have had somewhat weaker result on the disability line on workers comp and the more long tail lines. So they are still delivering higher combined ratios than the more pure PNC. And then looking at the longer term picture, what's happening in Storebrand is that we're moving from a predominantly long tailed insurance business to a more short tailed insurance business with more P&C in it.

I think it's fair to say that it's quite a strong seasonality in the Nordics when it comes to insurance. It goes without saying with the winter, with the car insurance and so on. So typically you see higher combined ratios in the fourth quarter and the first quarter. But it also goes with the more personal lines in corporate pension where you see more disability reported in the winter time compared to holiday seasons and summer. So seasonality is a part of this. And then again, fourth quarter will be fourth quarter. We have Amy and these kind of things. But long term, of course, we see this ability, some pockets still coming out with negative results. But we have pricing effects coming into the first of January in this smaller portfolios that we believe will take care of the profitability in these products and also as i talked about our well concept really shows promising results and i think might be a differentiator for us all and also reduce our costs in this disability products going forward

As for the partial internal model, as you're familiar with, we've sent it to the regulator and we're now in the period where we are discussing elements of the model with the regulator. I think in general, it's very hard to guide on the timelines when you're working together with the regulator. And it's also worth noting that this is the first partial internal model for a Norwegian life insurance company. So this is new also for the regulator. So those discussions will continue and it's hard to guide on an exact timeline. The most important part though is that we use this model as a risk management tool and a capital allocation tool day to day in store brand and it helps us make better decision on a capital allocation.

Thank you. Can I just ask you on the disability point, are you able to give us an estimate of the combined ratio for disability with an insurance in the first nine months of the year?

I think we're close to 100, but a little below. I'm looking at you, Johannes.

Yeah, I think that's true, Kjetil. The corporate insurance segment we report externally very much represent our disability products. The disability-linked insurance product is the largest by far product in that segment, and it has delivered results year to date, more or less in line with our plans. Thank you. Thank you. We have a next question here from Thomas Svensson in SEB. Please go ahead, Thomas.

Yes. Good morning. I have two questions. First, on the mortgage bank, you post strong growth QOQ this quarter as well. So with increased competition from S-bank and maybe other players, do you see any change in How much do you feel the increased competition in this mortgage lending space? And second question on non-life insurance. What is the message from the sales force these days? Are there any change in sort of the competitive pressure on selling these non-life insurance policies or is it unchanged?

Thank you. I can start with the bank. I must say the development in the bank is very strong. We have a very dedicated sales force in the bank in combination with the digital platform Kroon as we talked about. We are not seeing that the growth in the bank is tailing off. We have a good inflow of clients and I think one of the elements here is to have good solutions digital solutions you have are close to your customers you are swift in giving the right well certificates and so on if someone is hunting for for a new home so it's a lot lot of elements that is important to to attract new customers and we feel that we are in a very good competitive positions to still have good growth in in the bank going forward

Then I'll just continue on the insurance part. What we have seen so far is a little bit higher churn in the second half of the year, but not any large changes really. You see that we're still increasing the market shares with 0.2 percentage points now in the quarter. I think we are, of course, trying to have a disciplined approach to pricing in this segment, as this is a segment where we need to, from time to time, have AMIs and other things. So I think a disciplined market and, you know, there's competition, but there is not a huge increase in churn.

Okay, thank you for that.

Thank you, Thomas. It looks like we've covered all the questions, so that wraps up today's presentation. We look forward to seeing you again on the Capital Markets Day on December 10th here at Livsaker. Thank you for attending and goodbye.